Shortly after the onset of the 2007 housing crash, I attended a presentation by Nassim Nicholas Taleb, a former options trader and professor whose work addresses the problems of randomness. His book The Black Swan is considered one of the most influential books since the second world war. Every trader worth their salt was in attendance.
The topic of conversation that day was the so-called “Black Swan” events like the collapse of single-family housing. Taleb sought to explain this once-in-a-generation event — and why almost no one saw it coming.
While Black Swans typically occur in finance, in this episode, I wonder; could the outcome of the 2022 midterms fall into Black Swan territory?
Referenced in this episode:
The Red Wave was No Match for a Black Swan
Opinion: Biggest loser of the midterm elections? The media.
Hedge-Fund Manager John Paulson's Greatest Trade Ever
The Fiction of the Self-Made Billionaire
The Abortion Election: How Youth Prioritized and Voted Based on Issues
Episode #4: Were the Midterms a Black Swan Event?